The Parliament has approved the bill to strengthen the Tax Administration Act (No. 3/2010), introducing harsher penalties for tax offences and expanding the enforcement powers of the Maldives Inland Revenue Authority (MIRA).

The bill, introduced by Vilimalé MP Mohamed Ismail on behalf of the Government, was passed on Wednesday with the backing of 60 lawmakers, and has been referred to the Parliamentary Committee on Economic Affairs for further evaluation.

The proposed legislation aims to bolster MIRA’s ability to identify and recover unpaid taxes, particularly in cases where individuals fail to submit tax returns. The amendments would allow MIRA to determine tax liabilities independently in the event of non-compliance, while also broadening the powers of the Commissioner General of Taxation.

A key change in the bill is the replacement of home confinement with prison sentences for wilful non-filing of tax returns. If enacted, those found guilty could face one to six months in prison and fines of up to MVR 250,000, with more serious offences carrying jail terms of up to three years.

The bill also proposes increasing the daily late payment penalty from 0.05 per cent to 0.1 per cent of the unpaid tax amount. Additionally, it introduces a fixed daily fine of MVR 50 for delayed return submissions, replacing the current discretionary penalty of fine not exceeding MVR 50 per day, and revises procedural rules for issuing official notices. Notices would be considered legally served if delivered by mail, email, via MIRA’s online portal, or in person.

Eydhafushi MP Ahmed Saleem and Dhiggaru MP Ahmed Nazim both backed the bill, with MP Saleem highlighting that over MVR 15 billion in unpaid taxes threatens fiscal stability and burdens honest taxpayers. He added that tax rates in the Maldives are low by global standards, offering no excuse for evasion. MP Nazim noted the reforms would help curb financial misconduct, including misuse of funds and concealment of wealth.

The bill is part of fiscal reforms intended to reinforce the Government’s revenue collection capabilities as it faces growing financial obligations. If passed into law, the amendments will come into effect following presidential assent and publication in the Government Gazette.